PARCC used New Mexico's education department as the purchasing agent for the contract, which is expected to affect between 6-10 million students enrolled in schools across the 14 states. In New Mexico, the PARCC test is scheduled to go into effect this coming school year.

The scope of the contract, which is estimated to bring Pearson more than $1 billion over an eight-year period (the contract is for four years but PARCC has the option to renew it for another four), brought controversy even before Pearson won it in May.

Last December, the Washington DC-based American Institute for Research filed a protest with the state purchasing agent arguing that the bid for the contract was written favorably for Pearson. Namely, AIR’s takes issue with how the bid required the winner of the contract—whether it was Pearson or a different company—to use Pearson’s online testing system for the first year of testing.

Such requirements were uncompetitive to other companies, AIR argued. Indeed, only Pearson responded to the request for proposal for the PARCC contract.

But both PED and Pearson wrote in filings to the state purchasing agent that AIR was only looking to break up the contract to benefit itself. Such actions, they argued, would cost taxpayers more money and delay the state's work in reforming education.

State Purchasing Agent Larry Maxwell sides with PED in his determination, arguing that the bid "was a careful and thoughtful decision and approach made for the benefit of the public."

"PED made a determination that their needs could be best met by procuring the services in the way in which they structured this RFP," Maxwell writes in the determination. "They determined this structure was the most practicable given the totality of the circumstances with which they had to deal."

AIR now has two options: drop their complaints completely or appeal the decision in Santa Fe's District Court. AIR Executive Vice President Jon Cohen tells SFR that his nonprofit doesn't want to see a Pearson monopoly over PARCC.

"We'd like to see more competition," AIR Executive Vice President Jon Cohen tells SFR. "We're going to circle our wagons and consider our options."